House Bill No. 249 seeks to amend the Texas Tax Code by imposing new limitations on the increases in the appraised value of real property for ad valorem tax purposes. Key changes include the modification of Section 1.12(d) to clarify the appraisal ratio for properties under Section 23.23, while removing references to Section 23.231. The bill also repeals a previous amendment to Section 1.12(d) that was set to take effect in 2027. Additionally, the heading of Section 23.23 is updated to specify that it pertains to "real property" rather than just "residence homestead," and new subsections are introduced to establish rules regarding the appraisal of real property, including conditions for increasing appraised values.

The bill allows appraisal offices to increase the appraised value of real property by a maximum of five percent of the previous year's appraised value, along with the market value of new improvements. It also defines "new improvement" and clarifies that "real property" includes manufactured homes qualifying as residence homesteads. Several provisions related to the circuit breaker limitation on appraised value are repealed, streamlining the appraisal process. The bill is set to take effect on January 1, 2026, but its implementation is contingent upon the approval of a constitutional amendment proposed by the 89th Legislature, which aims to limit the maximum appraised value of real property to 105 percent or more of the previous year's appraised value. If the amendment is not approved by voters, the provisions of this bill will not take effect.

Statutes affected:
Introduced: Tax Code 1.12, Tax Code 23.23 (Tax Code 1, Tax Code 23)